"Autumn Moving Season + Jeonse Shortage"... Capital Region Jeonse Prices Soar

Hanam in the 3rd New Towns Sees 0.43% Increase... Growth Rate Expands

Panoramic View of Gamildong, Hanam-si

[Asia Economy Reporter Onyu Lim] As demand increases during the autumn moving season, the shortage of jeonse (long-term lease) properties continues, leading to a sustained rise in jeonse prices in the Seoul metropolitan area. In particular, Hanam, where a large number of prospective buyers are waiting to apply, is experiencing a soaring jeonse price trend.

According to the Korea Real Estate Board on the 27th, as of the survey on the 21st of this month, the jeonse price increase rate for apartments in the metropolitan area recorded 0.16%. This marks the same increase rate for five consecutive weeks. It has been on an upward trend for 59 consecutive weeks since the second week of August last year.

The metropolitan area apartment jeonse prices rose by 0.02% to 0.07% weekly from March to May this year during the spread of COVID-19, then increased the rate of rise in June and July, and peaked at 0.22% in the first week of August immediately after the implementation of the new Lease Protection Act.

Since then, the rate has slowed to 0.18% (second week of August), 0.17% (second week of August), and 0.16% (third and fourth weeks of August, first, second, and third weeks of September), but the shortage of jeonse properties continues, keeping prices from falling and maintaining an unstable situation.

An official from the Korea Real Estate Board analyzed, "Due to the low interest rate trend, the implementation of the new Lease Protection Act, and the autumn moving season, the jeonse price increase trend continues mainly in areas with good location conditions, especially near subway stations."

In particular, Hanam, which is affected by the waiting demand for subscription in Wirye New Town and the 3rd New Town Gyosan, recorded a 0.43% increase rate. Hanam is facing a severe shortage of jeonse listings. This area is evaluated as a highly preferred location for prospective buyers due to its excellent accessibility to Gangnam.

Accordingly, Hanam recorded the highest jeonse price increase rate nationwide over the past year. According to KB Real Estate Live On's housing price trends, the average apartment jeonse price per 3.3㎡ in Hanam was about 11.261 million KRW last August but rose 30.88% to 14.738 million KRW last month.

In fact, an 84㎡ apartment at Hanam The Sharp Central View in Deokpung-dong was contracted on the 17th for a deposit of 650 million KRW. This is 130 million KRW higher than the previous highest price of 520 million KRW in July.

Moreover, on the 19th of last month, the Ministry of Land, Infrastructure and Transport and Hanam held a residents' briefing session regarding the urban railway route plan within the Gyosan district and decided to re-promote the extension plan of Line 3, further raising expectations.

If the extension of Line 3 connecting Songpa-gu in Seoul, Hanam Gam-il district, and Gyosan district is confirmed, it is expected to affect prices not only for apartments in Hanam but also for urban lifestyle housing and officetels.

Consequently, interest in residential products preferred by newlyweds and others is increasing. The "Gam-il Station Truel" being supplied in Hanam Gam-il district is the first small-sized residential product supplied within the district, designed with units ranging from 38 to 51㎡. With kindergartens and elementary schools planned within walking distance, it is attracting significant attention from young people and newlyweds.